How Home Sellers can Beat the Competition and Sell for More This Winter!
Every year around this time we talk about how listing your home in the winter makes you more money. This has never been truer than this winter because the inventory of homes for sale has never been lower. In fact, as of Monday, January 3rd, there were just 11,225 homes on the market in Massachusetts- the lowest in recorded history! Every year inventory is at its lowest point in the winter months and this is why we always say that selling in the winter is the best time of year to sell.
This graph shows January inventory over the last 24 years:
This graph shows weekly inventory YOY going back to 2014:
Anyone who thinks we are just saying this now because its winter should look back at some of our past blogs at other times of the year when we said the same thing. Like this past spring when we wrote a blog Don’t Worry Homebuyers, This Won’t Last Forever. We explain how the market shifts from a seller’s market in the winter and early spring to a buyer’s market in the late summer and fall.
Why Does This Happen?
Real estate is simply a game of supply and demand. The more supply there is, the more buyers have to choose from and the more they can negotiate on price terms. Less supply and more buyers gives the sellers the upper hand. That is exactly the state of the current market and the supply of buyers will only grow larger in the weeks ahead. Right now, in the first week of January, it is still slightly early. Yes, there are a good number of buyers out there but they aren’t out in droves yet. However, they will be within weeks as buyers always come out earlier than the majority of sellers and that is exactly what creates this imbalance.
This explains why homes sell for the most in the late spring. Don’t be confused by that statement. That is when the home sales actually close. The deals are negotiated much earlier; in winter and very early spring. Spring closings tend to get pushed off until the school year is out in June.
This line graph illustrates average home sale prices per month for the last 11 years. You can see that the clear peak in June:
Every year, we hear home sellers ask very valid questions like, “Aren’t I better off selling when my flowers are up and my yard is landscaped?” The simple answer is, NO. Reason being, that by that time you will be competing with substantially more homes on the market and most of them will have pretty flowers too!
Take a look at the monthly inventory report above over the last four years. You can see that inventory statewide is roughly 15-20% higher in early May than it is in January, as outlined in this blog we published earlier this year. Some towns are substantially worse than that.
Take a look at the increase in inventory from January 15th to May 15th in the towns below: (click to enlarge)
What should I do?
So, if you are planning to sell your home this spring and you truly want to sell for the most money, then you should strongly consider listing it much sooner and begin to prepare your home for a Winter Sale now. The optimal time every year is usually anywhere between January 20th and March 15th.
As recently predicted in Anthony Lamacchia’s 4 Housing Predictions for 2018, inventory levels are going to remain low in 2018, so it is likely to remain a seller’s market until a bit later in the year. Homes are selling very quickly this year due to the inventory levels.